Lacavera: There’s a “renewed opportunity for discussion” to purchase Mobilicity

Ian Hardy

June 4, 2013 7:51pm

[video src="http://mobilesyrup.com/wp-content/uploads/2013/06/tonymobi.m4a" width="640" height="20" ]

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Earlier today Industry Minister Christian Paradis denied TELUS’ $380 million bid to acquire Mobilicity.

Paradis was stern in his words about giving the new entrants a fighting chance. “Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit. Our government will continue to allow wireless providers access to the spectrum they need to compete and improve services to Canadians… I will not hesitate to use any and every tool at my disposal to support greater competition in the market.”

Tony Lacavera, WIND Mobile’s Chairman and CEO, stated in an an interview during the Canadian Telecom Summit that he is once again interested in opening discussions with Mobilicity to purchase or merge the two companies. WIND was previously in talks with the carrier last year, but the conversations fell through.

In light of the Industry Ministers decision, Lacavera said that “I think the decision today sets the stage for a renewed discussion between Mobilicity and WIND given that incumbents are, at least for the remainder of the set aside period, are no longer eligible buyers of that spectrum. I’ve maintained since inception of WIND that new entrants need to co-operate. We need to find a way to work together if we’re going to have a chance against going up against the big guys. So I maintain that view and I think this is a renewed opportunity for discussion.

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Mobilicity currently has 250,000 subscribers and 150 employees. If a deal between the two carriers would eventually come to be – which was a suggestion by Toronto-based Catalyst Capital Group (who’s also owns a portion of Mobilicity’s outstanding bonds) – it would bring their total subscriber base to over 850,000. This represents just over 3% of wireless subscribers in Canada.

  • Liberal Phone Person

    Better coverage? Possible AWS HSPA/LTE network? YES!

  • nancoo

    Windycity “we will blow the competition away”

    • Rayman

      Windcity “We will blow the high phone bills away”

  • Poik

    Like what said by one of the CEOs. We have 3 companies representing 9 brands running on 2 national networks. We have the appearance of competition without actually having it.

  • deltatux

    I would love to see WIND and Mobilicity merge. I like having more competition but I rather have 1 strong alternative than 2 “about to fail” alternative. Mobilicity has great densification and WIND needs more capacity in their existing market, Mobilicity would definitely compliment WIND Mobile should the deal goes through.

    • deltatux

      While that may be true, the Huawei towers that WIND uses can’t reach as far as the Ericsson towers that Mobilicity uses. Not sure if it’s because of the frequency in the AWS spectrum that WIND uses, or due to a weird quirk, but based on my tests living in the suburbs where WIND and Mobilicity’s towers are a lot more sparse, I can see the difference.

      Honestly, both will benefit immensely with the merge. Though, not entirely confident if WIND can swallow Mobilicity’s debt, and not sure if Vimpelcom wants to foot the debt in the end…

    • deltatux

      That may be true, and TELUS actually runs a mixed network and Huawei is one of the equipment manufacturers.

      What WIND needs is more towers because sometimes their data services jams even though there’s full signal in the downtown core and honestly yes, Mobilicity’s customers will benefit from the expanded networks but WIND customers would benefit from more towers to offload customers on the overloading of current towers.

    • 3doubled

      Yes, that happens to me almost every time I’m downtown. I thought it was some bug on my CM 10.1 ROM, but I guess it’s just a Wind feature! I never would have guessed going downtown would give me WORSE cell performance! They really need to fix that, it is crazy annoying.

    • Tom

      Also AWS 1700 is known for having bad indoor penetration compared to other frequencies. In downtown Toronto (especially around the university campus) a lot of people on Wind report bad signal or slow speeds inside their dorms even if it’s perfect outside. It’s a problem with T-Mobile USA as well, which is why TMo maintains a fallback 2G network and has started refarming their HSPA spectrum to 1900 Mhz.

    • 3doubled

      I definitely see poor building penetration, but in Toronto (including U of T) I don’t find poor signal is the problem. I will always have signal, sometimes I just have zero data performance despite my phone indicating a strong signal and data connection. Conversely, on McMaster campus, I almost never have Wind signal in and around the buildings that I work. Their coverage of that campus is horrific.

    • deltatux

      No, it’s over subscription on towers. I have friends who have Android devices with stock ROM where they can’t get data even though it’s at full signal.

    • deltatux

      Wouldn’t hurt WIND to keep those Ericsson-managed sites and honestly even WIND’s sites are leased since they don’t actually erect their own towers, they share it with others too. Ericsson just installs and maintains the towers for Mobilicity, they don’t own the sites.

    • Sweet

      I remember Mobilicity saying they’ve just about saturated their spectrum. So I don’t see Wind gaining a spectrum advantage by buying Mobilicity.

    • Erik T.

      Honestly? While I’d be all for WIND buying Mobilicity, the amount of debt that Mobi has at the moment would probably be enough to sink both of them… :/

    • deltatux

      Vimpelcom which is the majority stakeholder has the financial means to swallow the debt, but not sure if Vimpelcom would want to do that is why I stated in my reply above that, that would be the barrier.

    • hoo dat

      The Telus deal didn’t involve debt and I’m sure any future bid wouldn’t either. In these sorts of deals it’s one or the other; either a purchaser buys the debt for the full amount and takes control of the entity for a nominal price (say $1.00), or they buy the company outright and let the previous investors deal with the debt after the deal closes. Mobilicity revealed yesterday they are now losing $20M per month, no-one in their right mind would assume that kind of debt no matter how flush with cash they are. Mobilicity’s going to have to swallow their debt with what ever they make on the sale, this is an asset only sale.

  • Tom

    I am all for Wind+Mobilicity happening. Aside from it being an obvious move for BOTH companies, it will also make them a stronger player on the market. We desperately need a 4th player, otherwise we will be going back to the Dark Ages, with Canada having zero competition again.

    However, I do see Wind(icity) rising its prices. Is it bad? Not necessarily. For one, it will increase the revenue in-flow, which, in turn, will make Wind(icity) that much stronger. And even with an increase, I do not see unlimited everything (with data included + Fair Usage), being anywhere over $50/month, maaaaybe $60. I’d pay that for an unlimited plan, and so will thousands of other, especially if the networks keeps growing and improving.

    Merge, damn you, or perish!

    • disqus_zE6ZcfPPYc

      You must be kidding me. Or you’re posting here form Robelus. We came this far as mobile customers in this country to go back to $60/month plans? Get outta here…

    • racer911

      An all-you-can eat plan for $50/$60? I can easily stomach that. Show me another company doing that, unless it’s a deeply discounted promo. An all-inclusive plan like that will run you well over $100 with Robelus.

  • Vineet Sharma

    Sounds good…..go for it and that would be the first step to end the monopoly of big 3 .

  • silver_arrow

    I would love to see a Telus/Bell like agreement with Wind and Mobilicity where they agree to share their networks. It would greatly improve their coverage zones as well as let them focus on their expansions. There was a reason that Bell/Telus 3G network grew so quickly.

    I know they are knocking Bell and Telus for doing this but it seriously would beneft both companies

    • deltatux

      The main incentive for Bell and TELUS to rapidly expand their network was because they didn’t have a GSM-compatible network. They were afraid that all the roaming revenues would be fed to Rogers as they were the only ones with a nationwide GSM-compatible network. Both Bell and TELUS needed a 3G HSPA network before the 2010 winter Olympics and that’s why this network was built at a rapid rate.

      Bell and TELUS don’t really have any incentives to do the same for WIND and Mobilicity at all, in fact both companies rather the new entrants die than to share their networks with them.

    • lukev

      how is the Bell-Telus deal not collusion? They ought to allow any MVNO to use their network for the same rate Bell charges Telus.

    • Sweet

      I was thinking the same thing just a couple of weeks ago, asking why Wind and Mobi didn’t get together to build a network (as Bell and Telus did) or at least share towers.

  • jackjiarocks

    YES

  • jackjiarocks

    BTW , i though he is no longer the CEO?

  • Sweet

    About two months ago, the Mobilicity store by my place started offering Wind phones and plans. I figured it was a sign of things to come, and thus was really thrown for a loop when Mobi announced the deal with Telus.

  • One way

    Boy 1: So, like, you wanna go to the dance with me?

    Girl: LOL, like no. I can find someone cooler, I’d rather stay home alone than go with you. [gives Boy 2 a sexy smile] I’ll go to the dance with you…

    Boy 2: Damn, girl, you know I would. But I’m grounded for all my thuggin’. You should stay home from the dance and wait for me.

    Boy 1: I’m still here you know.

  • PT

    Tony Lacavera for Prime Minister of Canada! You go Tony!

  • Conception

    OH PLEASE LET THIS HAPPEN! I’m a Mobilicity customer and I would rather go with Wind than Telus any day…

  • Justin

    The WindCity

  • Bruce Donivan

    Lol all this complaining over a luxury.

  • magesnz

    May i bring a point, one of the new providers, Public Mobile has a 1900Mhz PCS network, if the 3 merge together, and refarming happens like it happens in the States with T-Mobile, maybe they can use the 1900 Mhz network as a core and AWS for cities and backup network, depend yes on the capability of the 1900 Mhz network to support users etc

    • Tom

      I think Robellus has a strangehold on that frequency, which is why the new entrants were forced to use AWS despite its problems (i.e. indoor penetration capability).

  • Brett Gilley

    I think the important point that everyone is missing is: What colour with they be?